Kenny Dalglish has been sacked as Liverpool manager after the Anfield club finished 8th in the English Premier League.
Dalglish, who is now 61, led the club to the Carling Cup and also the FA Cup final this season, but could not seal a Champions League spot.
A club statments said : "Results in the Premier League have been disappointing and to build on the progress that has been made, we need to make a change".
Owners Fenway Sports Group stressed that the decision to remove Dalglish "was not reached lightly or hastily" and that the search for a new manager would begin immediately.
Wigan manager Roberto Martinez and former Anfield boss Rafael Benitez have been installed as early favourites to fill the vacancy.